General Motors to idle Michigan site to relieve Volt inventory

Article by Anita Panait, on March 3, 2012

General Motors will temporarily halt operations for more than a month at its Detroit-Hamtramck assembly plant in Michigan to curb rising inventories of the Chevrolet Volt plug-in hybrid that is being produced at the site. GM will commence the five-week momentary shutdown of the plant on the week of March 19. Affected will be 1,300 people employed at the plant, who were informed of the decision on Thursday.

They will go back to work when the company resumes production on April 23, 2012, according to Chris Lee, GM spokesman. Lee said that the closure was sparked by the need to maintain the right inventory levels and the need continue to meet demand.

At the end of February, GM has a Volt inventory of 6,300 units, which are enough to last 154 days at current sales rates, following the latest sales of 1,023 vehicles in February 2012. The sales of Volt suffered a five-month low in January 2012 with just 603 units, no thanks to a federal probe into whether the Volt’s battery pack carry a fire risk.Regulators closed the investigation in January after deciding that the car was safe.

GM executives believe that the probe brought negative publicity on the Volt, thus severely affecting sales. Sales of Volts are closely monitored by GM’s rival carmakers as they also plan to introduce their own versions of electric vehicles this year and the next.  The Volt reports a battery range of around 35 miles, after which power to the car is now generated by a gas-powered generator to an onboard electric drive unit.

Despite the challenges that faced and is facing the Volt, CEO Dan Akerson regards it as a new source of the company’s pride, pointing to the plug-in hybrid as a symbol of the GM’s innovation and fresh thinking. He urged the company’s engineers and product planners to cut costs while extending the technology to other GM models.

The result is that Cadillac will feature the plug-in hybrid technology to its new coupe to be released in 2013. After missing a self-imposed Volt US sales target of 10,000 units in 2011, the company have withdrawn its other forecast of 60,000 plug-in hybrids in 2012. The Detroit-Hamtramck assembly plant is home to the Volt and Opel Ampera, soon to the redesigned Chevrolet Malibu once new engines become available.

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